The high cost of militant unions

It would give experienced workers at well established businesses a massive financial incentive to get laid off rather than kept on. Large redundancy payments backed by a union controlled fund entrench the golden handshake mentality which bedevils Australian industry from the boardroom to the shop floor. It is economic and social poison yet it is now the chief industrial objective of the Australian union movement – backed by the Labor Party’s new leadership.

Industrial action to coerce employers into joining Manusafe has occurred at Feltex, Godfrey Hirst, Coates Hire, Austrim Nylex, Electrolux, Tenneco, Transfield, Maintrain/Goninans, Air Grilles, Solectron, Hendersons, Taubmans, and Webco (as well as Tristar). In addition, Manusafe is part of a log of claims served on nearly 1000 employers covering 100,000 manufacturing workers.

In the carpet industry, Manusafe sparked a four week strike that threatens to drive both of the big manufacturers off-shore. It’s hardly in Australia’s national interest to lose this industry in the cause of union muscle-flexing but if it comes to a choice between gaining Manusafe and losing carpet manufacturing, the unions’ attitude, like Colonel Kurtz in Apocalypse Now, is that it’s necessary to destroy the industry in order to save it.

Manusafe is an immediate flashpoint compounding the chronic problems of businesses debilitated by years of industrial skirmishing. A study of the food processing industry, to be published next week by the Institute of Public Affairs, claims that unions are jeopardising Australia’s ability to value add by scaring off investors. The IPA says that without a big shift in Australia’s industrial culture, the best we can hope for is to be a produce shop rather than the supermarket to Asia.

According to the IPA, the Victorian food processing industry has shed more than 2000 jobs in the past 18 months, mostly because consistently poor work practices had depressed the long-term viability of big plants. Heinz closed its Dandenong plant after a 20 year history of strikes at the peak growing season and Australian tomato paste now goes to New Zealand to be turned into finished product. Nestle closed its Maryborough confectionary plant and relocated its regional headquarters to New Zealand after earlier discovering, during a six week industrial dispute, that it could land UK-sourced Kit Kat 10 per cent cheaper than the Australian product. Arnotts moved its major manufacturing plant from Victoria to Queensland to circumvent an enterprise agreement which gave a union-dominated works committee control over quality assurance, production and delivery rosters, time-keeping systems and the engagement of casual workers.

The "big picture" always matters. Having six different industrial jurisdictions continues to make as much a sense as having different rail gauges in different states. But the focus needs to be on tribunals as much as Parliament and on changing the culture of the workplace as much as the thinking of policy makers. The greatest industrial breakthrough in many years was not achieved by government nor by legislative change – although the law made it possible. Neither the Federal Government nor Federal legislation reformed the Australian waterfront. Chris Corrigan reformed the waterfront because he was prepared to make use of the legal options available to him under Federal law and because he knew that the certainty of a slow commercial death outweighed the risk of spectacular failure.

The law is far from perfect and still needs further reform (which the Government has already flagged) but making the most of the law we have is as big a challenge as further changing it. Legislative change is invariably abstract while case law deals in practical problem solving. It’s noteworthy that the Tristar dispute was settled shortly after the Federal Government announced its intention to intervene in Industrial Commission proceedings which the company had commenced. It shouldn’t just be left-wing unions who use the law creatively to advance their industrial objectives. If Industrial Commission and Federal Court precedents often seem union-friendly, it may be because judges have been consistently ruling on union applications.

Industrial reform misses the point if it doesn’t improve workplace practice and culture. As a nation we need to take stock of what’s really happening in our workplaces and make the changes necessary so that hard work pays off for investors and employees. It doesn’t mean changing systems so much as changing people’s attitudes and preconceptions. It doesn’t require sweeping legislative change so much as more determined use of the law which is already there. It doesn’t require new government initiatives so much as strong management and workers who can think for themselves. Government’s role is to uphold the rule of law, to make it clear where the national interest lies in the particular disputes which threaten to undermine it, and to make common cause with those who would bring a new spirit to the workplaces of Australia.